778-A - Contracts requiring down payments in escrow. - New York Statutes

§ 778-a. Contracts requiring down payments in escrow. 1. An escrow agent who undertakes to hold a buyer's down payment in the purchase and sale of a home shall have the fiduciary obligation to segregate and safeguard the buyer's down payment in a special bank account, and shall not commingle such down payment with the escrow agent's personal or business funds. 2. A contract which requires that a down payment be held in escrow shall identify the escrow agent and the bank in which the down payment shall be deposited during the term of the escrow. 3. An escrow agent shall not be required to maintain a down payment in a bank account which is separate from all other bank accounts, provided the escrow agent's books of account and banking records shall accurately show the allocation to each owner of all funds that are deposited in the escrow agent's special bank account and all transactions relating to the receipt and disbursement of escrow funds. 4. Unless the contract provides otherwise, an escrow agent shall not be required to deposit the down payment in an interest-bearing bank account. If the escrow agent is an attorney admitted to practice in this state, a bank account authorized by section four hundred ninety-seven of the judiciary law shall be a lawful depository for down payments held by the attorney in escrow. 5. The provisions of this section may be modified by a written agreement signed by the buyer, seller and escrow agent. 6. The provisions of this section are not exclusive and do not relieve a buyer, seller or escrow agent from compliance with all other applicable provisions of law, or from civil or criminal liability imposed by other applicable provisions of law.